The Supreme Court affirmed the judgment of the trial court entering an order enforcing a merger agreement between two churches, holding that the trial court had subject matter jurisdiction to adjudicate this dispute.
The two churches in this case entered into a merger agreement memorializing a merger between the churches. When one of the churches (Defendant) decided it wished to withdraw from the “proposed” merger, the other church (Plaintiff), instituted this action. The jury returned a special verdict in favor of Plaintiff, finding that the parties had reached a merger agreement and that Plaintiff had performed its obligations under the merger agreement. The trial court entered a final order in accord with the merger agreement and the jury’s verdict. Defendant sought to vacate the trial court’s order, arguing that the trial court lacked subject matter jurisdiction to enter it. The Supreme Court disagreed, holding that the trial court had subject matter jurisdiction either to adjudicate a breach of contract claim or to issue a declaratory judgment on the merger contract, and a pending bankruptcy did not foreclose the trial court’s adjudication of the merger contract. View "Pure Presbyterian Church v. Grace of God Presbyterian Church" on Justia Law

At issue in this dissenters’ rights case was the methods by which a trial court may determine the “fair value” of shares of a dissenting shareholder under Tennessee’s dissenters’ rights statutes, Tenn. Code Ann. 48-23-101, et seq.
The Supreme Court overruled Blasingame v. American Materials, Inc., 654 S.W.2d 659 (Tenn. 1983), to the extent Blasingame implicitly mandates use of the Delaware Block method for determining the fair value of a dissenting shareholder’s stock and adopted the more open approach set forth in Weinberger v. UOP, Inc., 457 A.2d 701, 712-13 (Del. 1983), which departs from the Delaware Block method and permits fair value to be determined by using any technique or method that is generally acceptable in the financial community and admissible in court.
Defendant minority shareholders were forced out of a corporation as a result of a merger. The corporation sought a determination as to the fair value of the minority shareholders’ stock. The trial court may have based its decision to discredit the testimony of the dissenting shareholders’ expert on the basis that Blasingame compelled use of the Delaware Block method to determine stock value. The Supreme Court remanded the case to the trial court to reconsider its valuation determination in light of this decision to partially overrule Blasingame. View "Athlon Sports Communications, Inc. v. Duggan" on Justia Law

At issue was the availability of appraisal rights under section 262 of the Delaware General Corporation Law.
Section 262 affords stockholders of Delaware corporations a statutory remedy for appraisal of their shares under certain circumstances. The statute provides that appraisal rights shall be available only for the shares of stock of a “constituent corporation” in a merger or consolidation, and the process for determining a stockholder’s entitlement to appraisal contemplates that the stockholder will relinquish its shares in the merger of consolidation. In the instant case, Dr. Pepper Snapple Group, Inc. and Keurig Green Mountain, Inc. agreed to combine their businesses. Dr Pepper stated that Dr Pepper stockholders would not have appraisal rights under section 262 in connection with the proposed transaction. Two stockholder plaintiffs filed this action challenging that decision. The Court of Chancery held (1) the term “constituent corporation” as used in section 262 means an entity actually being merged or combined and not the parent of such an entity, and therefore, Dr Pepper’s stockholders do not have a statutory right to appraisal under section 262(b) because Dr Pepper is not a constituent corporation; and (2) Dr Pepper stockholders are not entitled to appraisal because they are retaining their shares in connection with the proposed transaction. View "City of North Miami Beach General Employees’ Retirement Plan v. Dr Pepper Snapple Group, Inc." on Justia Law

Mass. Gen. Laws ch. 156C, 60(b) provides the exclusive remedy for dissenting members of a limited liability company that has voted to merge, so long as the merger is undertaken in accordance with Mass. Gen. Laws ch. 156C, 59-63.
In this case, a member of a limited liability company (LLC) conducted a merger in breach of his fiduciary and contractual duties. The judge granted equitable relief. At issue was whether distribution of dissenting members’ interest in the LLC is the exclusive remedy of minority shareholders who objected to the merger and whether the judge erred in declining to rescind the merger. The Supreme Court held (1) where, as here, a merger was not conducted in compliance with Mass. Gen. Laws ch. 156C, 63, the remedy provided by Mass. Gen. Laws ch. 156C, 60(b) providing for distribution of dissenting members’ interest is not exclusive; (2) the trial judge did not abuse his discretion in fashioning an equitable remedy in this case, as rescission of the merger would be complicated and inequitable; and (3) the portion of the trial judge’s decision that increased Plaintiff’s interest in the merged LLC to five percent is remanded because there was no basis in the record for that figure. View "Allison v. Eriksson" on Justia Law

Mass. Gen. Laws ch. 156C, 60(b) provides the exclusive remedy for dissenting members of a limited liability company that has voted to merge, so long as the merger is undertaken in accordance with Mass. Gen. Laws ch. 156C, 59-63.
In this case, a member of a limited liability company (LLC) conducted a merger in breach of his fiduciary and contractual duties. The judge granted equitable relief. At issue was whether distribution of dissenting members’ interest in the LLC is the exclusive remedy of minority shareholders who objected to the merger and whether the judge erred in declining to rescind the merger. The Supreme Court held (1) where, as here, a merger was not conducted in compliance with Mass. Gen. Laws ch. 156C, 63, the remedy provided by Mass. Gen. Laws ch. 156C, 60(b) providing for distribution of dissenting members’ interest is not exclusive; (2) the trial judge did not abuse his discretion in fashioning an equitable remedy in this case, as rescission of the merger would be complicated and inequitable; and (3) the portion of the trial judge’s decision that increased Plaintiff’s interest in the merged LLC to five percent is remanded because there was no basis in the record for that figure. View "Allison v. Eriksson" on Justia Law

The First Circuit reversed the district court’s denial of Eric Blattman’s motion to compel Thomas Scaramellino to respond to questions regarding certain documents in this appeal arising out of a civil action brought in a Delaware federal court concerning a corporate merger between Efficiency 2.0 LLC (E2.0) and C3, Inc.
As part of the Delaware action, Blattman attempted to depose Scaramellino, the founder of E2.0. At the deposition, Scaramellino refused to answer questions about the documents at issue by asserting attorney-client privilege and work-product protection. Blattman filed a motion to compel Scaramellino to respond to his questions regarding the documents. The district court denied the motion to compel based on Scaramellino’s assertion of the work-product protection. The First Circuit reversed, holding that the district court erred in ruling that Scaramellino was entitled to assert the work-product protection to defeat Blattman’s motion to compel. View "Blattman v. Scaramellino" on Justia Law

The First Circuit reversed the district court’s denial of Eric Blattman’s motion to compel Thomas Scaramellino to respond to questions regarding certain documents in this appeal arising out of a civil action brought in a Delaware federal court concerning a corporate merger between Efficiency 2.0 LLC (E2.0) and C3, Inc.
As part of the Delaware action, Blattman attempted to depose Scaramellino, the founder of E2.0. At the deposition, Scaramellino refused to answer questions about the documents at issue by asserting attorney-client privilege and work-product protection. Blattman filed a motion to compel Scaramellino to respond to his questions regarding the documents. The district court denied the motion to compel based on Scaramellino’s assertion of the work-product protection. The First Circuit reversed, holding that the district court erred in ruling that Scaramellino was entitled to assert the work-product protection to defeat Blattman’s motion to compel. View "Blattman v. Scaramellino" on Justia Law

The Supreme Court affirmed the ruling of the circuit court denying Petitioners’ motion for leave to file a second amended complaint and dismissing their pending amended complaint, holding that the circuit court did not err in concluding that, under controlling Delaware law, Petitioners lacked standing to pursue a derivative shareholder suit.
Petitioners filed a derivative lawsuit alleging claims of breach of fiduciary duties against Massey Energy Company’s Board of Directors and corporate officers. Subsequently, faced with a potential merger between Massey and Alpha Natural Resources, Inc., Petitioners filed a motion for leave to file a second amended complaint seeking to add individual and class action claims on behalf of the shareholders themselves. After the merger, Respondents moved oi dismiss Petitioners’ amended complaint and motion for leave to file the proposed second amended complaint, arguing that, after the merger, Petitioners were no longer Massey shareholders and lacked standing to assert derivative claims, and that amending their complaint a second time would be futile. The circuit court dismissed the amended complaint and denied the motion for leave to file the second amended complaint. The Supreme Court affirmed, holding that there was no error in the circuit court’s order because Petitioners were no longer Massey shareholders. View "California State Teachers' Retirement System v. Blankenship" on Justia Law

The Supreme Court reversed two orders of the circuit court unsealing an index of 349 documents and directing the Attorney General to produce eighty-nine of those documents.
Steel of West Virginia, Inc. (Steel) brought this action to enforce its request for production of material under West Virginia’s Freedom of Information Act (FOIA). The Attorney General received the 349 documents at issue in connection with his investigative powers under the West Virginia Antitrust Act regarding the proposed merger of St. Mary’s Medical Center, Inc. and Cabell Huntington Hospital, Inc. The Attorney General and St. Mary’s contended that the index of the 349 documents and the eighty-nine documents to be produced were exempt from disclosure. The circuit court awarded the production of the index as a sanction against the Attorney General for sharing part of the index with the Federal Trade Commission. The Supreme Court held (1) the sanction was inappropriate; and (2) the eighty-nine documents were not subject to rpdocution because the statutory exemption set forth in W.Va. Code 29B-1-4, which incorporates the confidentiality provisions of the Antitrust Act. View "St. Mary's Medical Center, Inc. v. Steel of West Virginia" on Justia Law

The Supreme Court reversed two orders of the circuit court unsealing an index of 349 documents and directing the Attorney General to produce eighty-nine of those documents.
Steel of West Virginia, Inc. (Steel) brought this action to enforce its request for production of material under West Virginia’s Freedom of Information Act (FOIA). The Attorney General received the 349 documents at issue in connection with his investigative powers under the West Virginia Antitrust Act regarding the proposed merger of St. Mary’s Medical Center, Inc. and Cabell Huntington Hospital, Inc. The Attorney General and St. Mary’s contended that the index of the 349 documents and the eighty-nine documents to be produced were exempt from disclosure. The circuit court awarded the production of the index as a sanction against the Attorney General for sharing part of the index with the Federal Trade Commission. The Supreme Court held (1) the sanction was inappropriate; and (2) the eighty-nine documents were not subject to rpdocution because the statutory exemption set forth in W.Va. Code 29B-1-4, which incorporates the confidentiality provisions of the Antitrust Act. View "St. Mary's Medical Center, Inc. v. Steel of West Virginia" on Justia Law